In Brief
A registered partnership firm's deed contained a clause (Clause 14) stipulating that upon a partner's death, surviving partners could purchase the deceased's share at a price based on the last audited accounts plus 10% annual interest. When the partner died in July 1990, the surviving partners gave notice in October 1990 and later claimed they had not fully complied with the clause. The High Court held the notice was not properly served on all heirs and directed dissolution with settlement 'as of date' at 6% interest. The Supreme Court reversed this, holding that the contractual clause was validly triggered, becoming binding on the legal heirs, and that the survivors must pay the deceased's 1/4th share at 10% interest from death. The Court rejected the partners' excuse that pending litigation justified withholding payment, as audited accounts were available.
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